First Steps Taken For Massive Fuel Cell Application

The Dow Chemical Company, the world’s largest chemical manufacturer, and General Motors Corp., the world’s largest automobile manufacturer, have reached initial understanding on what the companies says would be the world’s largest fuel cell transaction to date.

Washington, D.C. – May 8, 2003 [] The intent of this proposed arrangement is for GM to commercialize its hydrogen fuel cell technology to generate electricity from hydrogen created as a co-product at Dow’s operations in Freeport, Texas. The 30-square-mile complex in Freeport, 65 miles east of Houston, is Dow’s largest manufacturing facility and produces a significant amount of excess hydrogen as a byproduct. If tests proceed according to plan, Dow could eventually use up to 35 MW of power generated by 500 GM fuel cell units on an ongoing basis. This is enough electricity to power 25,000 homes for a year and is more than 15 times bigger than any other known fuel cell transaction, said the companies. The test is expected to begin during the fourth quarter of 2003 and to run through 2005, with plans to commercialize starting in 2006. Dow and GM teams are currently working to remove the final hurdles for placing the fuel cells in Dow’s chemical manufacturing facility. A final agreement between the two industrial giants is expected to be signed in the next few months. “This is a significant milestone — not only from a technology and business perspective, but from an environmental one as well,” said Bill Jewell, Dow’s business vice president of energy. If the tests are successful, Dow could become the largest user of fuel cell generated electricity in the world, said the company. “Technology moves forward in steps. This step can prove the feasibility of manufacturing and using fuel cells in significant quantities.” Though Texas is the first place where Dow and GM will test this technology, the two companies are already discussing the use of fuel cells to convert hydrogen to electricity in other Dow locations in the U.S. and Europe. “While this is a milestone event,” said Larry Burns, GM vice president of research and development and planning. “It points to a growing interest among businesses in using fuel cells to power factories and buildings, the most compelling reason for GM to collaborate with Dow is ultimately to reduce the cost of fuel cells and improve their durability so that we may put them in cars by the end of the decade.” Dow manufacturing is energy intensive and the cost of power is an important determinant of the company’s profitability. The arrangement will give Dow an additional supply of electricity. The 35 MW of power Dow will ultimately receive from this is about 2 percent of the total used at Dow’s Texas Operations. For Dow, finding Renewable Energy sources provides a triple advantage. Dow produces energy, relies on it for manufacturing, and uses it as a raw material in many of its products. Cogeneration based on natural gas is used to efficiently produce 95 percent of the power and steam Dow consumes in the U.S. The global competitiveness of Dow’s US operations has been negatively impacted by volatile natural gas prices as growing U.S. demand has continued to outstrip supply. Wind, fuel cells, solar and other alternative sources, combined with conservation and increased traditional energy supplies from coal, nuclear and more natural gas production, will all be needed to ensure continued economic growth. “This is an excellent example of environmental stewardship making good business sense,” Burns said. “By efficiently recycling co-product hydrogen with a fuel cell, Dow would be able to reduce its emissions and create electricity competitive with its other energy supplies. This kind of creativity will generate a stream of entrepreneurial thinking that will ultimately accelerate the arrival of the Hydrogen Economy. This deal is just a start.” Both Dow and GM are members of the Green Power Market Development Group, a unique partnership between the World Resources Institute and twelve major U.S. corporations, dedicated to building corporate markets for green power. “With a fuel cell transaction this size, Dow and GM continue to show that they are serious about alternative energy,” said Jonathan Lash, president of WRI.
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